stowell v. shhs, 1st cir. (1993)

7/26/2019 Stowell v. SHHS, 1st Cir. (1993)

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USCA1 Opinion

UNITED STATES COURT OF APPEALS FOR THE FIRST CIRCUIT

_________________________

No. 93-1254

CHRISTINE STOWELL, ET AL., Plaintiffs, Appellants,

v.

SECRETARY OF HEALTH AND HUMAN SERVICES, Defendant, Appellee.

________________________

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MAINE

[Hon. Gene Carter, U.S. District Judge] ___________________

_________________________

Before

Selya, Cyr and Boudin, Circuit Judges. ______________

_________________________

Patrick Ende, with whom Jack Comart and Pine Tree L _____________ ____________ ___________ Assistance were on brief, for appellants. __________ Robin S. Rosenbaum, Attorney, Civil Division,

_____________________ Department of Justice, with whom Stuart Schiffer, Ac _________________ Assistant Attorney General, Jay P. McCloskey, United St


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__________________ Attorney, and Barbara C. Biddle, Attorney, U.S. Departmen

__________________ Justice, were on brief, for appellee. Christopher C. Leighton, Deputy Attorney General, with

_______________________ Michael E. Carpenter, Attorney General, and Thomas D. War _____________________ _____________

Deputy Attorney General, were on brief for State of Maine, a curiae.

_________________________

September 10, 1993

_________________________

SELYA, Circuit Judge. Although this appeal presentSELYA, Circuit Judge.

_____________

issue of first impression that requires us to navigate a co

maze of statutes and regulations, its resolution turns on

interpretation of two words in common usage. We hold, as di

court below, that the Secretary of Health and Human Services

Secretary) permissibly concluded that the term "payment le

as used in 42 U.S.C. 1396a(c)(1) (1988) refers to base

payments received under the Aid to Families with Depen

Children (AFDC) program. Consequently, we affirm.


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I. BACKGROUND I. BACKGROUND

AFDC is a voluntary, cooperative federal-state so

service program paid for by both sovereigns but administ

largely by the states. See 42 U.S.C. 601-615 (1988 & S ___

III 1991); see also Doucette v. Ives, 947 F.2d 21, 23-24___ ____ ________ ____

Cir. 1991) (describing interactive nature of AFDC program).

heuristic purposes, we limit our discussion of this intri

program to the particular problem around which this

revolves.

Through AFDC, poor families receive a monthly sti

(the basic AFDC grant). The amount of the stipend varies

state to state and also varies according to family size.

family unit has some other income, say, child support payme

most states deem this money to offset the guaranteed AFDC sti

pro tanto. Under such a regime, a dollar is subtracted fro___ _____

family's basic AFDC grant for every dollar of supplemental in

received. See, e.g., Hassan v. Bradley, 818 F. Supp. 1174,___ ____ ______ _______

2


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& n.4 (N.D. Ill. 1993) (describing methodology and identif

states which employ it).

A few states, Maine among them, take a

conventional approach to supplemental income. Up to a po

Maine permits a family to receive such income without offset

it against the basic AFDC grant. Only when the fami

aggregate income reaches a designated level a level that

calls the "standard of need" does Maine begin to shrin

basic AFDC grant in proportion to the marginal amount

supplemental income received. In the bureaucratic idiom,

phenomenon is known as "gap filling" because no offsets are

until the family's supplemental income has filled the gap bet

the stipendiary amount of the basic AFDC grant and the (some

higher) standard-of-need amount. Even then, the offset

limited to the excess of familial receipts over the standar

need. See Doucette, 947 F.2d at 23-24. ___ ________

In 1991, Maine, faced with burgeoning budgetary

narrowed this gap by upgrading basic AFDC grants

simultaneously downgrading standards of need. This revision

effect on April 1, 1992 (after the district court lifte

temporary stay). As a result, AFDC-eligible families

relatively high amounts of supplemental income receive l

payments than before and families with little or no suppleme

income receive higher payments than before. More specifica

because child support payments are collected by the state

then transmitted to AFDC recipients as supplemental income,


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3

42 U.S.C. 602(a)(2) (1988), Maine's reduction in the stan

of need meant that certain AFDC-eligible families would rec

lower overall payments from the state than they would_______

received prior to May 1, 1988.1 After the changes be

effective, the Secretary continued to authorize Medicaid fun

for Maine.

Although the revisions did not ruffle federal feat

they prompted the instant suit. Seeking declaratory

injunctive relief, 5 U.S.C. 702 (1988), plaintiff-appel

Christine Stowell accused the Secretary of violatin

maintenance-of-effort provision contained in the Medi

Catastrophic Coverage Act of 1988, Pub. L. No. 100-360, 102 S

683.2 That provision, codified at 42 U.S.C. 1396a(c

____________________

1A concrete example may help to illuminate the effect ofrevisions. On May 1, 1988, a single mother with two depen

children would have received a basic AFDC grant of $416. Hafamily unit also received $157 in child support paymentswould have retained the entire amount ($573 per month).Maine's revisions boosted the same family's basic AFDC gran$453 per month, the concomitant lowering of the standard of n


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given the assumptions in our hypothetical, would have requireoffset of all supplemental income over $100 per month, orThe net effect, then, would have been to cap the family's t

monthly receipts at $553 ($20 per month less than the fa would have retained under the earlier regime). On the o hand, if our hypothetical family had no supplemental income,

revisions would have increased its receipts by $37 per monthamount by which Maine hiked the basic AFDC grant).

In constructing this example, we have excludedreference to the $50 "pass-through" payment described inU.S.C. 657(b)(1) (1988), which was unaffected by the revis

in question.

2Stowell also attempted to sue the state. That suitgone by the boards as a result of our holding thatmaintenance-of-effort provision imposed a duty only onSecretary. See Stowell v. Ives, 976 F.2d 65, 71 (1st Cir. 19

___ _______ ____

4

(1988), directs the Secretary not to approve any state's Medi

plan if the state's AFDC program sets "payment levels" lower

those in effect on May 1, 1988. Refined to bare esse

Stowell's position has consistently been that the maintenance

effort provision prohibits the Secretary from approving s

Medicaid plans if the state's AFDC payment levels are lower

those in effect on May 1, 1988; that the total amount of

Stowell and persons similarly situated currently receive

Maine is lower than the amount they would have received under

earlier (pre-May 1, 1988) rules; that, nonetheless, the Secre


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did not refuse to fund Maine's Medicaid plan; and t

therefore, the Secretary violated the maintenance-of-ef

provision.

The case proceeded as a class action3 and the par

submitted it on a stipulated record. The district court as

magistrate judge for a report and recommendation. Reasoning

Maine had not, in fact, reduced its payment levels below thos

____________________

3The plaintiff class comprises:

All families in the State of Maine who would be eligible for AFDC benefits and/or supplemental payments under 42 U.S.C

602(a)(28) [providing for payment of child support collected by the state] under the AFDC payment levels in effect in Maine on May 1, 1988 and who would receive a smaller total AFDC plus supplemental 602(a)(28) payment under the AFDC payment levels proposed to be effective April 1, 1992 than they would have received under the May 1, 1988 payment levels.

Stowell v. Sullivan, 812 F. Supp. 264, 266 n.3 (D. Me. 1993). _______ ________

5

effect on May 1, 1988, the magistrate recommended that the c

enter judgment for the Secretary. See Stowell v. Sullivan,


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___ _______ ________

F. Supp. 264, 266-71 (D. Me. 1993) (reproducing magistra

report). On de novo review, the court adopted__ ____

recommendation. See id. at 265-66. Plaintiffs appeal.

___ ___

II. ANALYSIS II. ANALYSIS

The issue is whether the Secretary's continued fun

of Maine's Medicaid plan, despite the state's decision to l

its standard of need, violates the maintenance-of-ef

provision.4 We have repeatedly urged that, when a nisi p ____

court handles a matter appropriately and articulates a s

basis for its ruling, "a reviewing tribunal should hesitat

wax longiloquent simply to hear its own words resonate." I

San Juan Dupont Plaza Hotel Fire Litig., 989 F.2d 36, 38_________________________________________

Cir. 1993). Because we are in substantial agreement

Magistrate Judge Cohen's thoughtful disquisition, see Stowel___ _____

Sullivan, 812 F. Supp. at 266-71, we invoke this principle________

confine ourselves to a few decurtate observations.

First: Whenever a court is charged with statu First: _____

interpretation, the text of the statute must be its star

point. See Estate of Cowart v. Nicklos Drilling Co., 112 S.

___ ________________ ____________________

2589, 2594 (1992). Here, however, the statutory language


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____________________

4The Secretary also argues that, even if the term "pay levels" is given the expansive reading that appellants sug the federal government's obligation to intervene would not a unless and until Maine sought approval of amendments to

Medicaid plan. We need not consider this contentionconsequently, take no view of it.

6

not directly answer the question posed. It provides that:

the Secretary shall not approve any State plan for medical assistance if

(1) The State has in effect, under its [AFDC plan], payment levels that are less than the payment levels in effect under such plan on May 1, 1988.

42 U.S.C. 1396a(c)(1). The term "payment levels," which is

defined elsewhere in the statute, could, as the Secretary cla

refer to the stipendiary amounts of basic AFDC grants; it c

also, as appellants claim, refer to total income, that is,

amounts plus supplemental income actually received. Given

plausible alternatives, and recognizing that the universe

interpretive possibilities may extend beyond them, we thin

statute contains an undeniable ambiguity.

Appellants resist this conclusion. Pointing out t

in certain other contexts, Congress referred to the basic


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grant as the "payment standard," 42 U.S.C. 602(h) (1988),

argue that the term "payment levels" must mean something e

This argument founders. It is apodictic that Congress may c

to give a single phrase different meanings in different part

the same statute. See Atlantic Cleaners & Dyers, Inc. v. Un ___ _______________________________ _

States, 286 U.S. 427, 433 (1932); Greenwood Trust Co.______ ____________________

Massachusetts, 971 F.2d 818, 830 n.10 (1st Cir. 1992), c _____________

denied, 113 S. Ct. 974 (1993). It is a natural corollary of______

truism that Congress, in its wisdom, may choose to express

same idea in many different ways. Cf., e.g., Cowart, 112 S.___ ____ ______

at 2596 (stating that Congress's eschewal of a term of art

7

elsewhere in the same statute, in favor of a more descrip

term, does not necessarily mean that the two terms bear diffe

meanings). Any other interpretive rule would defy human na

and ignore common practice. Courts should go very slowl

assigning talismanic importance to particular words or phr

absent some cogent evidence of legislative intent.


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Second: Appellants' attempt to score a touchdownSecond:

______

selective perusal of legislative history puts no points on

board. The centerpiece of this effort is a passage evinci

congressional purpose "to assure that the resources

Medicaid-related coverage of certain persons] are not dive

from the [AFDC] program." House Conf. Rep. No. 661, 100th Co

2d Sess. 145, 256, reprinted in 1988 U.S.C.C.A.N. 923, 1034._________ __

this language does not help to resolve the statute's lingui

ambiguity in appellants' favor.

For one thing, the passage, like the statute its

leaves unaddressed the question whether Congress's underl

concern lay with all payments affecting the AFDC program or

with the stipendiary amounts of basic AFDC grants an

ambiguous statute cannot be demystified by resort to equ

ambiguous legislative history. For another thing, to the ext

if at all, that the quoted passage indicates a b

congressional purpose to provide AFDC recipients with a f

safety net, we think it cuts against appellants' constructio

the term "payment levels." Because supplemental income

contingent on a nearly infinite variety of circumstan

8


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appellants' definition would at most guarantee AFDC recipien

hypothetical sum; the Secretary's reading, on the other

secures a fixed payment floor.

The sockdolager is that the quoted passage, rea

context, is counteracted by other items in the legisla

history, including those that stress the importance of conti

flexibility. Congress prized flexibility because it "allows

state to establish its own need and payment standards

assistance." S. Rep. No. 377, 100th Cong., 2d Sess. 1,

reprinted in 1988 U.S.C.C.A.N. 2776, 2826. Certainly,_________ __

Secretary's rendition of "payment levels" enhances a sta

flexibility while appellants' version detracts from it.

infra pp. 13-14. This jousting between archival excerpts dr _____

home the point that "reviewing legislative history is

looking over the crowd at a party and picking out one's frien

Patricia J. Wald, Some Observations on the Use of Legisla _________________________________________

History in the 1981 Supreme Court Term, 68 Iowa L. Rev. 195,_______________________________________

(1983) (quoting Leventhal, J.). In this instance, both s

have unearthed congenial acquaintances. The net result, howe

is that evidence gleaned from the legislative history does

tell a straightforward tale and, therefore, does not resolve


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ambiguity with which we are concerned.5

____________________

5By discussing the House Conference Report excerpt,not mean to imply that Maine has diverted resources from theprogram to the Medicaid program. There is no such evidencthe record. Thus, appellants' reading of the legisla

history, even if we were to credit it, would not necessa carry the day. See, e.g., Babbitt v. Michigan, 778 F. Supp.

___ ____ _______ ________ 947 (W.D. Mich. 1991).

9

Third: When a statute is silent with respectThird:

_____

specific question, courts frequently afford deference t

plausible construction offered by the agency charged

administering it. See National R.R. Passenger Corp. v. Bost___ _____________________________ ___

Me. Corp., 112 S. Ct. 1394, 1401 (1992) (stating that "[i]f_________

agency interpretation is not in conflict with the plain lan

of the statute, deference is due"); Chevron U.S.A., Inc. v.____________________

Inc., 467 U.S. 837, 843 (1984); Massachusetts Dep't of Educ____ ___________________________

United States Dep't of Educ., 837 F.2d 536, 541 (1st Cir. 19 ____________________________

Here, the agency that the Secretary heads, the Department


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Health and Human Services (HHS), is entrusted with administe

both the Medicaid and AFDC statutes. Since HHS interprets

maintenance-of-effort provision to refer only to the basic

grant, Chevron principles pose a formidable barrier

_______

appellants' path.

In an endeavor to skirt this barrier, appell

suggest that deference would be inappropriate here because

has not maintained a consistent position. The suggestion

factually unfounded and legally unpersuasive.

We begin by examining the facts. Although the agen

position has shifted in some respects over the years, it has

waffled with regard to the meaning of "payment levels." H

first public elucidation of the point appears in a

publication informing state officials that "if you

adjustments to your [AFDC] payment levels which do not resul

lower payment amounts being made to families with no count

10

income, you are considered to meet the Medicaid Maintenance

Effort Requirements." State Medicaid Manual 3205 (May 19


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In subsequent commentaries, HHS made plain that this refer

was intended to include only those families which receive

income over and above the basic AFDC grant. We see

inconsistency between this original interpretation, rou

contemporaneous with the statute's enactment, and the agen

current views.

Appellants' legal theory rests on an equally s

foundation. Agencies "must be given ample latitude to a

[their] rules and policies to the demands of chan

circumstances." Rust v. Sullivan, 111 S. Ct. 1759, 1769 (1 ____ ________

(citations and internal quotation marks omitted). An impor

corollary of this rule is that an agency's position may e

over a period of time without automatically forfeiting all cl

to judicial deference. And, moreover, an agency interpreta

that represents a modification of, or even a sharp depar

from, a prior interpretation does not necessarily eliminate

expertise-related reasons for judicial deference. See___

Chevron, 467 U.S. at 862-64. Thus, an explained modificatio_______

an agency interpretation ordinarily retains its entitlement

whatever deference may be due. See Rust, 111 S. Ct. at___ ____

(collecting cases). So it is here.6

____________________

6To be sure, in this case the agency claims that

position has been consistent throughout. It is too mucexpect that even bureaucrats a species renowned for masterthe fissilingual can explicate the reasons underlying a c

that was never made. Regardless, HHS has explained, cogently


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11

Next, appellants try to skirt the Chevron barrie_______

taking a different path. They asseverate that HHS's view me

little deference because determining this particular statu

meaning involves primarily judicial, as opposed

administrative, skills. The attempted end run fails.

The Chevron doctrine often requires different de _______

of deference in different situations. See Sierra Club v. Lar ___ ___________ __

___ F.2d ___, ___ (1st Cir. 1993) [No. 92-2227, slip op. at

18]. Although the need for deference diminishes as issues be

more law-bound and less moored to administrative expertise,

e.g., United States v. 29 Cartons of * * * an Article of____ _____________ ____________________________________

987 F.2d 33, 38 (1st Cir. 1993) (collecting cases), this case

not removed from the realm of specialized administra

knowledge. When Congress commanded the Secretary to ensure

"payment levels" were maintained, it left open the questio

how that term might be defined in a manner that would

promote efficient, fair administration of two complicated so


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service programs. The agency, in filling this lacuna, relie

its lengthy experience with the statutes involved. See___

Information Memorandum (August 5, 1992). Courts should

cavalierly discount the value of agency expertise painstaki

garnered in the administration, over time, of programs

remarkable intricacy. See, e.g., La Casa Del Convalecient___ ____ ________________________

____________________

in detail, why it believes its current interpretation of

ambiguous phrase is sound. No more is exigible. See Rust,___ ____

S. Ct. at 1769; Motor Vehicle Mfrs. Ass'n v. State Farm__________________________ ___________

Auto. Ins. Co., 463 U.S. 29, 42 (1983). ______________

12

Sullivan, 965 F.2d 1175, 1178 (1st Cir. 1992) (suggesting________

deference to agency expertise is particularly appropriate in

complex field of Medicare); Wilcox v. Ives, 864 F.2d 915, 92 ______ ____

(1st Cir. 1988) (Breyer, J., concurring) (suggesting

deference is appropriate where an agency has, through its

experience in administering a statute, gained a


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understanding of the relation of a given provision to the sta

as a whole); see also Friedman v. Berger, 547 F.2d 724, 727___ ____ ________ ______

(2d Cir. 1976) (Friendly, J.) (stating that the Social Secu

Act, of which AFDC and Medicaid are a part, is "al

unintelligible to the uninitiated"), cert. denied, 430 U.S._____ ______

(1977).

Fourth: Our last point is, in actuality, a subseFourth:

______

our third point. In this instance, reading the phrase "pay

levels" as encompassing only the stipendiary amounts of b

AFDC grants preserves the program's flexibility and facilit

its administration. Hence, the cardinal reason why deferenc

due is because the agency's interpretation of the disputed

is not only linguistically plausible but also eminently sensi

See 29 Cartons, 987 F.2d at 38 (explaining that the true mea ___ __________

of a court's willingness to defer may depend, in the f

analysis, on the persuasiveness of the agency's interpretat

given all the attendant circumstances); Mass. Dep't of Educ.,____________________

F.2d at 541 (similar).

States have traditionally been afforded a broad mea

of discretion in implementing the AFDC program. See Jefferso___ _______

13


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Hackney, 406 U.S. 535, 539-41 (1972). The murky language o_______

U.S.C. 1396a(c)(1) cannot readily be interpreted as a si

that Congress meant to scrap this tradition. Cf., e.g., Ro ___ ____ _

v. Wyman, 397 U.S. 397, 414 n.17 (1970) ("An extensive altera

_____

in the basic underlying structure of an established progra

not to be inferred from ambiguous language that is not clari

by legislative history."). Appellants' construction that

maintenance-of-effort provision is triggered whenever any fa

unit receives fewer total dollars in a given month than it

have received that month under the set of computational r

that were in effect on May 1, 1988 runs at cross purposes

this deep-seated discretion by inhibiting a state's abilit

reorder its priorities. For example, reading the term "pay

levels" as appellants prefer would preclude a state

distributing AFDC funds according to a new formula, althoug

state maintained (or, perhaps, even increased) its aggregate

expenditures.7 In contrast, interpreting the term "pay

levels" as referring only to basic AFDC grants, as the Secre

urges, provides all recipients a protective floor while s

permitting states to implement changes that more efficie

allocate scarce resources. There is every reason to believe


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this latter route, which preserves the discretion tradition

____________________

7The case at bar illustrates the point. Althoughreduced the amount of outside income a person may receive be

AFDC payments will be offset partially to save money, it also

another purpose: increasing the benefits available to more n AFDC recipients, i.e., those who receive basic AFDC grants

____ have little or no supplemental income.

14

available to the states in implementing the AFDC program

maximizes state flexibility, is a far closer approximatio

congressional intent. See S. Rep. No. 377, 100th Cong., 2d S ___

49, reprinted in 1988 U.S.C.C.A.N. 2776, 2826 (referring to_________ __

incidence of state flexibility in connection with need

payment standards).

Nor is this the only straw in the interpretive bre

We can safely assume that Congress, in enacting the stat

preferred administrative efficiency to administrative clut

See Dion v. Commissioner, Me. Dep't of Human Servs., 933 F.2

___ ____ _______________________________________

17 (1st Cir. 1991) (discussing congressional interest in

administratively streamlined procedure for food s


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recipients). This, too, cuts in favor of the Secretary for

Secretary's interpretation is administratively more workable

appellants' interpretation. If the term "payment levels"

basic AFDC grant amounts, both state and federal administra

can tell quite easily whether a proposed change in a state's

activates the maintenance-of-effort provision. If, on the o

hand, the term means all payments made to all AFDC recipients

prescribes a much more complicated, highly individual

calculation. Because the Secretary's reading of the sta

ensures that a significant portion of the finite funds avail

for AFDC and Medicaid go to needy recipients rather than to

costs of administrative implementation, it jibes more neatly

Congress's likely intent.

III. CONCLUSION III. CONCLUSION

15

We need go no further.8 When, as now, the case

debatable, the key phrase in the statute is patently ambigu

the legislative history is unilluminating, the subject matte

somewhat technical, and the indications are that Congress wa


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to take advantage of agency expertise, a plausible interpreta

of the disputed term, expressed with clarity by the a

charged with the statute's administration, necessarily car

great weight. To clinch matters, the agency's interpretatio

the phrase "payment levels" in the statute sub judice also___ ______

to maintain traditional programmatic goals and to promote

public interest in efficient implementation of the affe

programs. We hold, therefore, consistent with the Secreta

view, that the allusion in 42 U.S.C. 1396a(c)(1) to "pay

levels" refers only to the stipendiary amounts of basic

grants and not, as appellants have argued, to total mo

actually received by each AFDC family. Accordingly, the jud

below will be

Affirmed. Affirmed. ________

____________________

8We do not tarry over appellants' assertionadministrative interpretations and statutory provisions in o

fields treat certain supplemental income in the same fashiobasic AFDC grants. In the first place, these interpretati

all of which deal with program administration, are analytic distinct and, therefore, inapposite. See Stowell v. Sulli ___ _______ ____ 812 F. Supp. at 270-71 (discussing identical proffer). In

second place, this is a zero-sum game; the Secretary has pro a counter-list of interpretations and provisions which t supplemental income and basic AFDC grants differently. Comp ___ e.g., 51 Fed. Reg. 29,223, 29,224 (1986) (declaring suppleme ____

payments to be AFDC expenditures for purposes of matching fe funds) with, e.g., Winslow v. Commissioner, Me. Dept. of H ____ ____ _______ _____________________________ Servs., 795 F. Supp. 47, 49-50 (D. Me. 1992) (uphol ______


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Secretary's determination that supplemental payments are notpayments for purposes of computing Medicaid income levels).

16

stowell v. shhs, 1st cir. (1993)

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